Hundreds of protesters continued to demonstrate on 6 June against a new income tax law despite Prime Minister Hani al-Mulki’s resignation on 4 June, although turnout has fallen from a peak of around 4,000 protesters on 3 June. The protests, the most significant in the Kingdom since 2012, began on 30 May when dozens of trade unions called a general strike, eight days after the Cabinet approved tax rises on most workers and economic sectors. The protests have mostly taken place at Amman’s 4th Circle roundabout, which is near the Prime Minister’s Office, but have also occurred in other major cities, including Irbid and Karak. The King appointed former Education Minister Omar al-Razzaz to succeed al-Mulki and urged unions and parties to engage in talks with the Government on amending the tax law.

The International Monetary Fund (IMF) agreed to provide Jordan with USD 723 million in loans in 2016, on condition that Amman worked to reduce its USD 37 billion public debt. The Government has consequently imposed an austerity programme, for instance removing exemptions on sales tax and cutting fuel and bread subsidies in January. This has fuelled anger among ordinary Jordanians, resulting in periodic socio-economic protests in recent months. However, the latest changes to the tax law were especially provocative, given that the Government did not take any simultaneous steps to relieve pressure on citizens, such as introducing measures to boost employment. This contributed to the protests’ large turnout, particularly among the middle classes, who will be most heavily affected by these latest reforms.

The protests contrast with rallies in Jordan during the 2011-12 Arab Spring unrest, which were primarily led by the Muslim Brotherhood and had a more political focus, including calls for comprehensive constitutional change. In the present case, unions have orchestrated protests with little involvement from political parties, while union leaders have stressed their support for the monarchy. This less politicised approach has ensured a conciliatory response from the Government, with the King saying on 4 June that the protests made him “proud” to be Jordanian and that he cannot accept that his citizens should “suffer”. He also sent his son, the Crown Prince, to meet with protesters in Amman. His firing of the Prime Minister, a tactic the King has employed every few years to relieve pressure on the Government, and his choice of al-Razzaz, whose university reforms as Education Minister were broadly welcomed, has also appeased protesters, as shown by the reduced turnout.

The King’s response has so far placated some unions, with the General Federation of Jordanian Trade Unions, which represents seventeen organisations, calling on 5 June for a suspension of the general strike to allow for talks with the Government. This suggests the demonstrations will continue to ease over the coming days, although small protests will persist. Moreover, Al-Razzaz is highly likely to make some concessions, such as raising the income tax threshold or slowing the law’s implementation, which will also help reduce anger. However, the IMF’s demands and the scale of Jordan’s debt, currently standing at 95% of GDP, mean ministers have little scope to entirely scrap the law or significantly ease the broader austerity programme, and so some discontent will persist over the coming year.

For now, the Brotherhood has not actively engaged in the protests and has offered only verbal support, in part because it does not want to deter middle class Jordanians, who are relatively sceptical of the Islamists, from participating. However, should the Government fail to reach a deal with the unions, then the Brotherhood could step up its involvement in order to be seen as opposing the reforms, thereby boosting its popularity beyond its conservative base. Any rise in Brotherhood participation in protests would increase the risk of clashes with the authorities. However, this remains unlikely for now, especially as the Brotherhood will also remain wary of increasing its involvement for fear of provoking a government crackdown on its members. This will ensure that while sporadic protests will persist over the next few months, most such gatherings will be peaceful and wider unrest is unlikely.

Keep informed, stay prepared, be proactive, and make the best decisions for your business. Sign up for your free trial of the Assynt Report today.